Toomey said in a statement on Monday that the bill included “an overly broad definition of broker” that would include nonfinancial intermediaries such as miners and network validators that don’t have control of digital assets or related personal information. He’s also concerned it would allow the Treasury secretary to define a digital asset with broad discretion, according to an aide.
The Biden administration and the lead Republican negotiator of the bipartisan infrastructure deal, Sen. Rob Portman of Ohio, had each previously suggested reporting rules to help enforce payments of taxes owed on digital coins. The requirements aim to get at the “tax gap,” the difference between taxes owed and paid to the federal government. IRS Commissioner Charles P. Rettig has estimated that gap could be $1 trillion per year.
Portman is planning remarks on the Senate floor at some point during the infrastructure bill debate in which he’ll argue the rules for brokers wouldn’t apply to nonfinancial players, such as cryptocurrency miners.
“The legislation does not impose new reporting requirements on software developers, crypto miners, node operators, or other non-brokers,” Portman spokesman Drew Nirenberg said in a statement. “It simply clarifies that any person or entity acting as a broker — including crypto exchanges — must comply with IRS reporting requirements. This is a standard practice identical to the well-established, universally accepted tax reporting rules for stock and commodity trades.”
‘This is the way’
While it’s clear senators aren’t intending to require IRS reporting from these sorts of intermediaries, businesses would prefer the text be amended for clarity, said Chamber of Digital Commerce President Perianne Boring.